Counterfeiting the Dollar: North Korea’s Secret Weapon

by Kevin D. Freeman on February 28, 2012

In the book, Secret Weapon (visit www.secretweapon.org to learn more), we detailed how counterfeiting was used by the Germans during World War II to undermine the British economy. This was known as Operation Bernhard and became a major effort under the direction of Major Bernhard Krueger. The efforts were so successful that even the Bank of London was fooled (as noted on pages 23-24). Some historians believe that even though the Operation was insufficient to destroy Britain during the war, the post-war effects helped undermine the pound and ultimately removed its status as a global reserve currency. Whatever the cause, the pound was weakened in the post-War era and British power declined as a result. During the Suez Canal crisis, it was currency weakness that forced the Brits to back down to American demands under Eisenhower (covered on pages 27-29).

In the book, we also noted that North Korea had its own counterfeiting operation underway, pumping out $500 million to $1 billion annually, maybe the most significant export the North Koreans have (pages 24- 25). Last week, Time Magazine acknowledged this with an article by David Wolman. Describing the North Korean counterfeits, Wolman states:

“These ultra-counterfeits are light-years beyond the weak facsimiles produced by most forgers, who use desktop printers. As an anticounterfeiting investigator with Europol once put it, “Superdollars are just U.S. dollars not made by the U.S. government.” With few exceptions, only Federal Reserve banks equipped with the fanciest detection gear can identify these fakes.”

Many believe that the “superdollars” are of such high quality because they have the same presses that we use and access to the same paper and inks. One of the fears is that the money generated will be used to buy weapons. But what if the money itself is the weapon? This was alluded to in a Moneynews story that appeared tonight:

Could North Korea print millions upon millions of nearly undetectable fake U.S. $100 bills and get away with it? They already do, points out one counterfeiting expert. And they seem poised to do more . . .Pyongyang could use their superdollars to flood the world with fake U.S. cash, thus devaluing the currency rapidly, but Wolman believes their aim is likely a bit more prosaic: Using the funny money to finance their own needs.